Task 1 i. After knee surgery, your trainer tells you to return to your jogging program slowly. He suggests jogging for 12 minute each day for the first week. Each week thereafter, he suggests that you increase that time by 6 minutes per day. How many weeks will it be before you are up to jogging 60 minutes per day? Solution:

Therefore, if there are 500 bacteria at the beginning, 1024 000 bacteria will there be after 24 hours.

Task 2 i. What is the different between trade discount and cash discount? * Trade discounts are payments to distribution channel members for performing some function. For example if Sara had a warehouse, stocked my goods in Sara warehouse, and then shipped my goods to my customers for me. Sara would offer me an invoice with her trade discounts. The discounts could be 10/15/10 Net 30. In the example 10% could indicate a 10% discount for warehousing the product, an additional 15% discount for shipping the product, and an additional 10% discount for keeping her shelves stocked. * Cash discount is in most cases they are offered to a business's customer as an incentive to pay the bill faster. For example, 3% 15 days net 30. If the customer pays the invoice in 15 days they will receive a 3% discount from the invoice. ii. On 20th January 2006, Mr. A bought some goods at $100 000 with cash discount term 3/10, n/30. To pay the invoice on 30th January, she borrowed the money for 20 days at 10% per annum simple interest. How much did she save by borrowing to take advantage of the discount? Solution:

i. Alan decides to set aside $50 at the end of each month for his child’s college education. If the child were to be born today, how much will be available for its college education when s/he turns 19 years old Assume an interest rate of 5% compounded monthly. Solution:

...earnings before taxes and depreciation for five years. Hertz is an all-equity firm in the 34-percent tax bracket. The required return on the firm’s unlevered equity is 10 percent, and the new fleet will not add to the risk of the firm.
a. What is the maximum price that Hertz should be willing to pay for the new fleet of cars if it remains an all-equity firm?
b. Suppose Hertz purchases the fleet from GM for $325,000, and Hertz is able to issue $200,000 of five year, 8% debt in order to finance the project. All principal will be repaid in one balloon payment at the end of the fifth year. What is the Adjusted Present Value (APV) of the project?
17.1 a. The maximum price that Hertz should be willing to pay for the fleet of cars with all-equity funding
is the price that makes the NPV of the transaction equal to zero.
NPV = -Purchase Price + PV[(1- TC )(Earnings Before Taxes and Depreciation)] +
PV(Depreciation Tax Shield)
Let P equal the purchase price of the fleet.
NPV = -P + (1-0.34)($100,000)A50.10 + (0.34)(P/5)A50.10
Set the NPV equal to zero.
0 = -P + (1-0.34)($100,000)A50.10 + (0.34)(P/5)A50.10
P = $250,191.93 + (P)(0.34/5)A50.10
P = $250,191.93 + 0.2578P
0.7422P = $250,191.93
P = $337,095
Therefore, the most that Hertz should be willing to pay for the fleet of cars with all-equity funding is $337,095.
b. The adjusted present...

...Use the following form to address the five methods of computing book depreciation for health care organizations:
QUESTION
ANSWER – Do not forget to list references at the bottom of the paper. Write a minimum of 30 words for each area listed.
Straight Line Depreciation:
No salvage
Salvage
The simplest most commonly used depreciation method. The straight line depreciation method assigns an equal or even amount ofdepreciation expense over each year of the assets life. The calculation is (purchase price of asset-approx salvage value) divide by estimated useful life of asset.
Accelerated Book Depreciation:
Sum of Years’ Digits Method
Sum-of-the- Years (SYD) computes depreciation by multiplying the depreciation cost of the asset by a fraction. The depreciation is accelerated to reflect that items lose value more rapidly early in their history than late. Calculation = n(n+1) divided by 2.
Accelerated Book Depreciation:
Double Declining Balance Method
The double declining balance (DDB) computes depreciation by multiplying the assets net book value at the beginning of each year by a constant percentage or factor. The constant factor is twice the straight line rate. Under the DDB double means twice or 200% of the straight line depreciation.
Accelerated...

...080 sacks of corn, which resulted in income before Royal Taxes of 27,220 sacks of corn. Amenhotep required a Royal Tax of one out of every four sacks of the yearly harvest to be paid at the end of the year. Sihathor paid 12,150 sacks of corn in Royal Taxes, which gave him a net income of 24,133 sacks of corn. Pemsah paid 8,825 sacks of corn in Royal Taxes, which gave him a net income of 18,395 sacks of corn.
Financial accounting policies and procedures helped to make the statements of each farm’s operations relevant and reliable. The straight-line depreciation method depreciated the oxen, farm implements, and building over their useful lives. For example, the cost of purchasing the oxen divided by their expected life yielded the yearly depreciation amount applied for the oxen. Due to the death of Sihathor’s worker, he granted the worker’s widow an annuity of one sack of corn per lunar cycle for the rest of her life. The present value of this annuity was 95 sacks of corn, which we accounted for as a pension expense of 95 sacks of corn. The net loss from the death of the two oxen totaled 83 sacks of corn.
Policies and Procedures for Statement of Corn Flows
We prepared the statement of cash flows using the direct method and cash basis of accounting to calculate the net effects of corn inflows and outflows on the corn account. The net corn flow measures each farm’s ability to meet financial obligations. The net income differs...

...-------------------------------------------------
Workshop 5 – Capital Budgeting II
1. Basic Concepts Review
a) In applying Net Present Value, what factors do we include, and what factors do we ignore?
Use cash flows not accounting income
Ignore
* sunk costs
* financing costs
Include
* opportunity costs
* side effects
* working capital
* taxation
* inflation
2. Practice Questions
a) After spending $3 million on research, Better Mousetraps has developed a new trap. The project requires an initial investment in plant and equipment of $6 million. This investment will be depreciated straight-line over five years to a value of zero, but, when the project comes to an end in five years, the equipment can in fact be sold for $500,000. The firm believes that working capital at each date must be maintained at 10% of next year's forecasted sales. Production costs are estimated at $1.50 per trap and the traps will be sold for $4 each. (There are no marketing expenses.) Sales forecasts are given in the following table. The firm pays tax at 35% and the required return on the project is 12%. What is the NPV?
|
Figures in 000's | |
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Unit Sales | | 500 | 600 | 1,000 | 1,000 | 600 |
Revenues | | 2,000 | 2,400 | 4,000 | 4,000 | 2,400 |
Costs | | 750 | 900 | 1,500 | 1,500 | 900 |
Depreciation | | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 |...

...Depreciation Methods
Depreciation is the accounting process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Factors Involved in the Depreciation Process
1. What depreciable base is to be used for the asset?
2. What is the asset’s useful life?
3. What method of cost apportionment is best for the asset?
Depreciable Base for the Asset
The base established for depreciation is a function of two factors: the original cost, and the salvage or disposal value. Salvage value is the estimated amount that the company will receive when it sell the asset or removes it from service. It is the amount to which the company writes down or depreciates the asset during its useful life.
Example:
An asset is purchased for $10,000. The company believes that it has a salvage value of $1,000.
Original cost $10,000
Less: Salvage value 1,000
Depreciation base $ 9,000
Methods of Depreciation
The accounting profession requires that the depreciation method employed be “systematic and rational.” The following are examples of depreciation methods:
1. Activity method (units of use or production)
2. Straight-line method
3. Decreasing charge methods (accelerated):
a. Sum-of-the-years’ digits...

...﻿Value chain and globalization
Introduction
The process of corporate life is always a sea change and sometimes there are high tides and sometimes are quiet times. Day to day companies are faced with new challenges, whether it be a consolidated organization or a small business just starting, always emerging issues that affect their behavior and their performance. Owing to the consequences of an impressive development of technology and globalization that we are living in this age.
Nowadays are faster changes, new challenges threaten seriously survival of organizations, new foreign competitors, mobilization of capitals, difficulties in retaining human capital and changing technologies are elements that require managers to be prepared for change and have ability to motivate employees in order to have continuous renewal. “Micro and small enterprise dominated industries have been both threatened and provided with advantages as a result of dynamic trends related to globalization” (Kula et al., 2006). Value chain is not only to implement new management models that ultimately prove to be only uncertain. However, management of change consists of take advantage of changes in business environment for the interest of the organization. That is why companies should not only be flexible, but also managers should develop a keen sense to anticipate change; therefore companies will be able to achieve to be at the forefront. According to Porter (1998)...